Marketing communicationsa.Chapter 1: What is advertising?1.

Journalists, for example, might define it as a communication, public relations, or persuasion process; a.businesspeoplesee it as a marketing process; b.economists and sociologists tend to focus on its economic, societal, or ethical significance.c.

Albert Lasker, generally regarded as the father of modern advertising, defined advertising as salesmanship in print, driven by a reason why

2.

Very structured form of communication, employing both verbal and nonverbal elements that are composed to fill specific space and time formats determined by the sponsor.

i.

could be consumers, who buy products for their personal use. a)Or they might be businesspeople who would buy large quantities of products for resale in their stores. b)

It is therefore nonpersonal, or mass communication.1)

Most advertising is paid for by sponsors2)

The American Red Cross, United Way, and American Cancer Society are among the many national organizations whose public service announcements (PSAs) are carried at no charge because of their nonprofit status.

a)But some sponsors don’t have to pay for their ads. 3)

most advertising is intended to be persuasive—to win converts to a product, service, or idea.4)

Mass Mediai)TV, radio, Word of Mouth (WOM), newspaper, a)

advertising reaches us through a channel of communication referred to as a medium.5)

advertising is typically directed to groups of people rather than to individuals.ii.

Advertising is, first of all, a type of communication.a.

Advertising is the structured and composed nonpersonal communication of information, usually paid for and usually persuasive in nature, about products (goods, services, and ideas) by identified sponsors through various media.

3.

marketing is a set of processes—a series of actions that take place sequentially—aimed at satisfying customer needs profitably.

i.

ii.

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

a.

The marketing strategy will help determine who the targets of advertising should be, in what markets the advertising should appear, and what goals the advertising should accomplish.

a)

The advertising strategy, in turn, will refine the target audience and define what response the advertiser is seeking—what that audience should notice, think, and feel. We will discuss the development of marketing, advertising, and media strategies later in the text.

b)

The ultimate goal of the marketing process is to earn a profit for the firm by consummating the exchange of products or services with those customers who need or want them.

1)What is the goal of marketing and what role does advertising play in achieving that goal?i.

These processes are typically broken down into the 4 Ps of the marketing mix: developing products, pricing them strategically, distributing them so they are available to customers at appropriate places, and promoting them through sales and advertising activities

b.

Economics: The Growing Need for Advertising (P.8)c.

Role of Advertising in Business4.

Week 1: Chapter 1 notes - Advertising Yesterday, Today and TomorrowMonday, July 27, 2009

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d.

Describe the seven basic functions of advertising. i.

ii.

Branding: to identify products and their source and to differentiate them from otherse.

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iii.

Chinese invent paper, Europe had first paper mill by 12751)

First hand flyer appears in 1472a)

Ads so numerous that they were "negligently perused" and used in excess to gain attention "by magnificence of promise". (beginning of "puffery"

i)First misuse noted by Samuel Johnson, a famous English literary figure, in 1758b)

Boston Newsletter began ads in 1704c)

Johannes Gutenberg invents the printing press by 1440's2)

Preindustrial Age (p.10): developments that enabled advertisingiv.

Price currents: let retailers know about sources of supply and shipping schedules for unbranded commodities.

i)Used mostly as information vehiclesa)

Advertising to consumers was left to retailersb)

Lasted until the end of WWI (1918)1)

Profession of advertising began when Volney B. Palmer set up agency in Philly in 1841.2)

Formal market surveysa)

Hired first copywriter in 1892i)

Planning, creating and executing complete ad campaigns in exchange for media-paid commissions or fees from advertisers

b)

Fee based, full service agency started in 1869 by Francis Ayer3)

Photography introduced in 1839 (p.13)4)US Govt begins free rural mail delivery in 1896.5)Public schooling helped drive up literacy to ~90%6)

Industrializing Age (p.12): The industrial revolution begins in mid-1700'sv.

Consumer packaged goods become prevalent1)

Wrigley's spearmint gum, Coca-Cola, Jell-O, Kellogg's Corn Flakes and Campbell's soup.a)

Outlawing humor, style, literary flair and anything that might detract from his basic copy strategy One.Principles includedi)

Scientific Advertising written by Claude Hopkins, copywriter at Albert Lasker's agency, Lord and Thomas, published in 1923.

b)

Mfg's changed from "production orientation" to "sales orientation"2)

Industrial Age (p.14): began at turn of 20th century and ran well into 1970'svi.

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of preemptive product claim repeated loudly and often.Radio is born and become main means of mass communication and a powerful new advertising medium3)

Daniel Starch, A.C. Nielson and George Gallup founded research agencies.i)Agencies needed to improve effectiveness and turned to researcha)

Product differentiation became key element of advertisingb)

October 29, 1929 the stock market crashed and the great depression began.4)

Fueled "keeping up with the Jones" mentalitya)Spawns new video agencies; Leo Burnett, David Ogilvy and Bill Bernbachb)

Ad must point out the products USP; features that differentiate it from the comp.i)Unique selling propositions championed by Rosser Reeves of the Ted Bates Agency.c)

Television launches in 1941.5)

Me-too product features killed the market seg. Era. a)Market Segmentation focus6)

Thus, it became a more effective way to use product differentiation and market segmentation.i)

Positioning proved effective in separating a particular brand from its competitors by associating that brand with a particular set of needs that ranked high on the consumer’s priority list.

a)

Jack Trout and Al Ries trumpeted the arrival of the positioning eraby insisting that what really mattered was how the brand ranked against the competition in the consumer’s mind—how it was positioned.

7)

People became truly aware of the sensitive environment in which we live and alarmed by our dependence on vital natural resources.

1)

Energy company began campaign to slow the demand for their productsa)demarketing became a more aggressive strategic tool for advertisers to use against competitors, political b)opponents, and social problems.

the aging of traditional products, with a corresponding growth in competitioni)the growing affluence and sophistication of the consuming public, led by the huge baby-boomer generation.

ii)

Two related economic factors characterized marketing in this period:c)

The most important factor was competition, intensified by growing international traded)

Clients trimmed their ad budgets, and many turned to more cost-effective sales promotion alternatives, such as coupons, direct mail, and direct marketing to build sales volume.

i)As the U.S. economy slowed, many companies were chasing too few consumer dollars. e)

As the 1990s unfolded, In three short years, the advertising agency business lost over 13,500 jobs. f)

In 1994, ad budgets surged ahead by 8.1 percent to $150 billion nationally.i)By 2000, when U.S. advertisers spent $247.5 billion, a whopping 11.3 percent increase over the previous year.

ii)

In 2001, the bubble burst; the combination of a mild recession, the collapse of the stock market, and the bust of the dotcoms all contributed to a record decline in advertising activity.

iii)

After 911, spending in the United States declined 6.5 percent to $231 billion, and overseas spending dropped 8.6 percent to $210 billion

iv)

By 2005, U.S. advertising expenditures had reached $264 billion, more than completely recovering from v)the 2001 decline.With the explosion of the Internet, we had entered a new electronic frontier—what Tom Cuniff, VP/creative director at Lord, Dentsu & Partners, called “the second creative revolution.”

vi)

By the mid-1990s, U.S. marketers had begun shifting dollars back from sales promotion to advertising to rebuild value in their brands.

g)

New term demarketing appeared.2)

Post industrial age: began ~1980 as a period of cataclysmic changevii.

Driven by on-demand, satellite and cable channels dedicated to shopping, news and other vertical interests.1)DVRs and TiVo allowed viewers to skip commercials2)

One of the major features of TiVo is its ability to target potential customers and measure effectiveness against that target.

a)TiVo spawned "advertainment"3)

Narrowcasting becomes a new mediumi.

Email marketing, YouTube, Facebook…1)Computer impact was huge. ii.

The Global Interactive Age: Looking at the Twenty-first Centuryf.

Identify the key developments that have taken place throughout history that have had an impact on the advertising g.industry.

In an effort to do a better job of relationship marketing, companies are now learning that they must be consistent in both what they say and what they do.

1)

That’s what integrated marketing communications really meansa)They must integrate all their marketing communications with everything else they do, too.2)

Protecting that asset has become the new marketing imperative for the twenty- first century. i.

In the heated competition of the global marketplace, their most important asset is their customer and the relationship they have with that person or organization.

h.

Newspapers, magazines, radio, television, and many Web sites all receive their primary income from advertising.i.Advertising serves other social needs besides simply stimulating salesa.

In 1906 Congress responded to public outrage by passing the Pure Food and Drug Act to protect the public’s health and control drug advertising.

i.Since its beginnings, the profession has had to struggle with issues of truthfulness and ethics. b.

Society and Ethics: The Effects of Advertising (p.20)5.

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control drug advertising.In 1914, it passed the Federal Trade Commission Act to protect the public from unfair business practices, including misleading and deceptive advertising.

ii.

“to be protected against fraudulent, deceitful, or grossly misleading information, advertising, labeling or other practices

1)

To be given the facts needed to make informed choices.2)

In 1962 Pres. Kennedy signed Bill for Consumer Rights which gave consumers 4 basic rights.iii.

But now attention has shifted to more subtle problems of puffery, advertising to children, the advertising of legal but unhealthful products, and advertising ethics

1)Today, corporate America has generally cleaned up many of the inequities in advertising.iv.

self-interest, complete information, many buyers and sellers, and absence of externalities.i.

It identifies and differentiates products;1)communicates information about them; 2)induces nonusers to try products and users to repurchase them; 3)stimulates products’ distribution; increases product use; 4)builds value, brand preference, and loyalty; 5)and lowers the overall cost of sales. 6)

functions and effects of advertising in a free economy: ii.

1.

In economic theory, there are four fundamental assumptions of free-market economics:a.Summary:6.

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1.

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